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South Korea and North Korea diverged due to different institutions from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
South Korea and North Korea provide a compelling case study of how institutions can shape the destiny of nations. Decades ago, these two countries were relatively similar in terms of their economic development and living standards. However, over time, they diverged significantly, with South Korea becoming a prosperous and democratic nation, while North Korea remains impoverished and totalitarian. The key difference between the two Koreas lies in their institutions. South Korea embraced inclusive institutions that allowed for economic growth and innovation. In contrast, North Korea adopted extractive institutions that stifled entrepreneurship and progress. In South Korea, property rights were protected, the rule of law was upheld, and political power was distributed among various groups. These inclusive institutions created a conducive environment for businesses...
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